Dairy markets need to balance rising demand and supply for sustainable business success, finds Tetra Pak Dairy Index

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Tetra Paka world leader in food processing and packaging solutions, today releases its seventh Dairy Index. The report highlights the opportunities and challenges posed by rising global demand, which is set to overtake the available supply over the next decade. The company says that producers in both developed and emerging dairy markets need to address the careful balancing act required to ensure sustainable business success.

Tetra Pak’s Dairy Index reveals that global demand for milk is set to surge by 36% in the next decade, largely due to population growth, rising prosperity and urbanisation in Africa, Asia and Latin America. However, milk supply and demand is imbalanced across the world – rising demand in emerging dairy markets is unlikely to be fulfilled by locally produced raw milk, while developed dairy markets producing a milk surplus face the challenges of competing for export and responding to falling domestic consumption.

Yet despite increased pressures across Europe, for those operating in the UK, liquid dairy product consumption is actually growing, as consumer habits towards milk are evolving. This has led to a high level of new dairy product launches such as snacks, breakfast drinks, caffè lattes, yoghurt drinks and indulgent milks. These products have expanded usage occasions designed to suit changing lifestyles.

Dennis Jönsson, president and CEO of Tetra Pak Group, said: “The predicted surge in global demand offers a huge opportunity for dairy companies in developed markets to export powder and ambient liquid dairy products to growing economies. However, to ensure long-term success, these producers need to balance the ‘quick wins’ of export against the requirement to continue to grow their domestic markets.

“Meanwhile, dairy companies in import markets must overcome the challenge of securing a sustainable, high quality milk supply while keeping pace with growing demand. Markets such as China and Saudi Arabia are doing so in multiple ways: increasing investment in domestic dairy farming, partnering with well-established foreign companies, and diversifying their offer with value-added products. Fundamentally, these are measures that will help to achieve the vital balancing act of shoring up the future of a sustainable dairy industry.”

Andrew Smith, marketing manager for Dairy, said: “We are starting to see the first signs of milk processors in UK really looking to capitalise on export opportunities for liquid milk. At the same time there is a continued need for the industry to make the most of changing consumer habits and a desire for value-added milk products.

“The good news is that we are already seeing a high level of new dairy products launched, from breakfast drinks to indulgent milks. These products have expanded usage occasions and are helping the dairy industry to overcome some of the challenges it is facing.”